Amazon has announced the closure of 68 physical stores in the US and UK. This includes all of its Amazon bookstores and its “4-Star” stores, an attempt to bring into the traditional brick and mortar retail, the highest-ranked products of its online store.
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Closing dates are not yet known. They will be communicated in each store as the chosen date approaches.
Whole Foods, a supermarket chain, has been one of the biggest acquisitions in Amazon's history. The company has since invested heavily in its grocery business. As reported by Reuters, Amazon has told them that the store closures are intended to focus more "on its grocery markets and a department store concept in the future."
Something we have already been seeing in recent months when it announced the introduction of its new “Just Walk Out” technology at Whole Foods and the expansion of Amazon Fresh.
COVID-19 hit physical stores very hard, as it caused many of them to close on numerous occasions. However, Amazon's stores have never had a large weight in the company's total revenue.
In the fourth quarter of 2021, the company reported that net sales from its physical retail business generated $4.688 billion, up from $4.269 billion in the prior-year quarter. These are only about 2% of its total revenues.
And that is precisely why Amazon's future is not secure, even when it currently holds over 25% of American e-commerce. Want to know why? Enjoy our article about it!
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